USDJPY- Further Downside May Prevail

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USDJPY- Further Downside May Prevail

April 4, 2013Technical AnalysisBy sharptrader

Fundamental Analysis

The new governor of the Central Bank of Japan, Haruhiko Kuroda, said that he is looking to increase the maturity dates for the government bonds from three years to five years. The Bank of Japan is buying these bonds currently to support its asset purchase programme. He also confirmed that the Bank of Japan may also look to buy riskier assets, which is an aggressive step to beat its deflation target however, such a decision needs to be approved by all nine board members at their next policy meeting.

Technical Analysis

The USDJPY pair is trading within the downward channel on a 30 minute time frame. The price action pierced its Bollinger band near its minor support level which was also touching the lower line of this downward channel. However, the price action remains weak within this channel so bias could be towards the downside. The RSI is trading in line with the price action which also favours the biasness to the downside.